Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. you are evaluating a product for your company. you

You are evaluating a product for your company. You estimate the sales price of product to...

50.1K

Verified Solution

Question

Finance

You are evaluating a product for your company. You estimate thesales price of product to be $160 per unit and sales volume to be10,600 units in year 1; 25,600 units in year 2; and 5,600 units inyear 3. The project has a 3 year life. Variable costs amount to $85per unit and fixed costs are $206,000 per year. The projectrequires an initial investment of $342,000 in assets which will bedepreciated straight-line to zero over the 3 year project life. Theactual market value of these assets at the end of year 3 isexpected to be $46,000. NWC requirements at the beginning of eachyear will be approximately 16% of the projected sales during thecoming year. The tax rate is 30% and the required return on theproject is 11%. What will the year 2 cash flows for this projectbe?

Multiple Choice

  • $1,234,000

  • $1,120,000

  • $1,600,000

  • $1,746,000

Answer & Explanation Solved by verified expert
3.6 Ratings (513 Votes)
    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Advance Math
1.2K views

Q58 Describe the general approach by which analysis of variance is applied and the type of...

Chemistry
1.2K views

A) A 193.0 L sample of gas of the upper atmosphere at a pressure of 4.8...

Chemistry
1.2K views

Hydrogen sulfide decomposes according to the following reaction,for which Kc = 9.30 multiplied by 10-8 at...

Psychology
1.2K views

1. How does marital satisfaction change over the course of a marriage? What factors influence marital satisfaction? 2....

Physics
1.2K views

Derive the Maxwell construction by considerations involving the minimization of the Gibbs potential instead of the...

Advance Math
1.2K views

Poducts  z1 and z2 as a z1=5+3i and z2=4-2i, write the following in the form...

Physics
1.2K views

3 Seven homogeneous bricks each of length L are arranged as shown in figure 9...

Statistics
1.2K views

B Practice drawing FBDS 10 lb A B O E A AB 0 2 0...

Statistics
1.2K views

Which scatter plot indicates a perfect positive correlation A D The graph B E shows...

Accounting
1.2K views

Los datos de ingresos y gastos para el ao calendario actual de Dawg Electronics Company...

Accounting
1.2K views

On 1/1/19, Greene company leased machinery with a fair value of $1,600,000 from gray corporation....

Finance
1.2K views

step by step no.44 question Take over premium = Dollar value Pre-merger...